Devolution and the UK Economy by Bailey David;Budd Leslie;

Author:Bailey, David;Budd, Leslie;
Language: eng
Format: epub
Publisher: Rowman & Littlefield Unlimited Model

Chapter 7

Securing Economic and Social Success

The Local Double Dividend1

Neil McInroy and Matthew Jackson

INTRODUCTION

It is well known that long-standing problems of inequality, disadvantage and poverty persist even in times of economic growth. Whilst a recent return to some national economic health has occurred, it is already evident that growth is geographically and socially skewed and uneven. Long-standing issues of de-industrialization, worklessness, low skills and underinvestment remain in many areas. So, even with a return to economic growth for the nation as a whole, a positive economic and social future for some local areas – and the people that live in them – is not assured. Indeed, some of the recent thinking around agglomeration theory advocated by the so-called New Economic Geography school (e.g., the World Bank, 2009) purports that government should effectively abandon efforts to rebalance the economy and let market forces determine the economic and social landscape (see Bailey et al. in this volume).2 Under this laissez-faire approach, the prosperity of the United Kingdom should be shaped by where spatial agglomeration is greatest and productivity rewards are highest – namely in London, and the other major cities. Other places, as a result, would be losers and become more reliant on the success of ‘super-cities’.

In contrast to the argument that policy should focus solely on economic success where there is already significant critical mass, this chapter advocates an approach to local prosperity whereby an enabled local state seeks to ensure that local communities enjoy the fruits of any growth (Carnegie UK Trust, 2014). As a counterpoint to spatial agglomeration, the argument for fairer and sustainable growth appreciates that spatial imbalances are wasteful and socially destabilizing (Martin et al., 2013). Economic efficiency is an important policy goal, but this chapter asserts that social equity and fairness are of equal importance. The devolution of powers and resources to local government and cities could facilitate this localized approach. Indeed, freed from the tramlines of central government, there could be a significant social dividend in the development of forms of economic growth that fit more securely with local characteristics and social need.

Up until recently, the community benefits of growth have been mostly piecemeal and confined to planning gain and particular policy initiatives, such as Business Improvement Districts or funding tools such as Tax Incremental Financing and planning gain on new housing developments. The ideas set out in this chapter take the concept of community benefit and social equity further, with greater stress on how social investment complements and actively supports economic growth. This concept of a double dividend is already happening, as the case studies shown later in the chapter demonstrate.

However, in many instances, the examples lack momentum and cultural will and are “resource lite.” The challenge facing policy makers is how to raise awareness, enhance capability and scale up best practice. Against the backdrop of continued fiscal austerity, many areas will soon have no other option than maximizing the resources and assets they have. The prospect of doing nothing will merely fuel existing spatial social and economic inequalities.

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